1 Answer
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It doesn't do anything blatantly stupid, and develops your lands so they'll look a lot like the AI's lands.

What it won't do automatically is city specialisation. It's a powerful strategy to have commerce cities that build no troops just lots of markets and banks, science cities that build lots of libraries and science buildings, and military cities that just build barracks and then crank out unit after unit after unit. The first two kind of cities need their lands developed to make commerce, some food, some hammers. The military city needs no commerce, at least as long as you don't need to turn commerce into culture, but benefits from hammers and enough food to use them all. Then there are the Great People farms that have lots of food and use it to run many specialists.

The advantage is that you save resources by only constructing buildings that make a large contribution to your economy. A handful of markets in the right cities can do more for your economy than building markets everywhere that all earn mediocre amounts of gold.

Each kind of city has a different development needs. Some of that comes from careful selection of city sites, but some of it from the micromanagement of your workers.

You can have an automated specialization to some extent by turning on Emphasize in the city screen. It does affect what improvements workers build around that city too. P.S. in my opinion even complete newbie can manually do better than automated workers
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SejanusMar 26 '11 at 10:50

I never really understood why people create a commerce city when they could also build a barrack's and military stuff as well. Whenever i play online or with AI's i never have to specalize my city because i tend to be passive with a large army. I guess I run a more Technocracy Civilization. It's better to have a few expensive riflemen when everybody else is stuck at longbowmen. :)
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FireplayDec 7 '11 at 17:37